subject: Using Dropshippers to Sell High Demand Products on eBay [print this page] Using Dropshippers to Sell High Demand Products on eBay
Introduction
So,howdoesdropshipping work?
- You find a product that is in high-demand on eBay.
- You find a dropshipper that stocks the item.
- Ensure that you can sellthen item at ahigher price than you are purchasing the item for (taking into account your costs).
- Advertise the product on eBay.
- When the item is sold, pass the buyers details to the dropshipper who will send off the item for you.
- You then pay the dropshipper the pre-arranged drop ship' price.
The advantages of using dropshippers are largely self-explanatory, so although Idon't wish to put you off the idea I am going to concentrate on the potential pitfalls to give you the best possible chance of avoiding them.
Pay Attention to Profit Margins
Don't get too excited by the over-inflated examples' on how much you can make per product on dropshippers websites. Do the maths yourself and BE SURE that the necessary profit margin is there. Ensure that you carry out sufficient research you need to be confident that there is demand for your product on eBay. If your product has a high demand, the chances are that someone else knows about it and is also advertising that product how much are they selling it for and are buyers purchasing at this price?
You will also need to take into account your costs when calculating your profit-margins. You will have eBay insertion fees' and final value fees', as well as Paypal fees for receiving payments. On top of this, be sure to take into consideration the time it is going to take you to complete each auction is it a worthwhile venture? There is little satisfaction in relentlessly selling items at a marginal profit if it is going to take you 12 hours per week! Value your time.
Choosing a Dropshipper
Deciding which dropshipping company you are going to deal with is arguably as important as choosing the right product. Be certain that the company has been selling your products for at least 2 years. It is a sad fact that companies in this industry will often appear/disappear regularly. Be sure to remember that when advertising a dropshippers product on eBay - it is ultimately you who is responsible for ensuring the buyer gets what they paid for. So, for example, if you sell an iPod to a buyer only to find that your dropshipper is no longer in business, you are now legally responsible for ensuring that your buyer receives an IPod, regardless of your unfortunate situation. (I have managed to resolve a similar situation to this in the past by simply calling my buyer as soon as I was aware of the situation, explained my predicament, apologised and offered an immediate refund in full. However, it is clearly best to avoid this situation in the first place wherever possible).
You should avoid any lines of distribution that go beyond your dropshipping company. The company will often be acting as a middle-man' themselves this means that not only are at least two other people making a profit from your product before you purchase it, but there is also a lot more risk associated (there are now two companies between yourself and your seller). Be sure that your dropshipper stocks the products that they are selling at their own warehouse.
You should not need to pay for any monthly or yearly fees for the right to sell a dropshippers products. This is often the case with companies and I would always recommend proceeding with extreme caution in these situations, as the chances are you can find an equally profitable opportunity by using a company who is happy to build a relationship with you based on trust rather than asking for a regular fee.
Getting Started
Although selling through dropshipping can be a low-risk entry point to making money on eBay it is important that you find the right product, profit-margin and dropshipper to make the venture worthwhile. Make sure you take out the unnecessary risk from the venture and learn from those that have been there and made a fortune.
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